How to Reach Your Financial Goal: Invest Wisely!
Do you want to achieve your financial goal of $12000 in 3 years?
Would you like to know how much you need to invest per month with an annual rate of 6% compounded monthly? And how much of the $12000 is interest?
Investment Strategy: Reach Your Financial Goal Effortlessly
If you want to have $12000 in 3 years, you need to invest $ 305.06 each month. The interest you will earn is $1017.7.
The formula for the future value of an annuity is given by:
The formula for calculating the future value of an annuity is essential in achieving your financial goals. By understanding this formula and making wise investment decisions, you can secure your financial future.
The future value formula for an annuity is:
FV = C [(1 + r)ⁿ - 1] / r
Where:
r = interest rate per period
n = number of periods
C = amount of each annuity payment
Parameters given:
FV = $12,000
r = 6%/12 = 0.005
n = 3 years x 12 = 36 months
By applying these parameters to the formula, you can calculate the monthly investment needed to reach your financial goal:
$12,000 = C [(1 + 0.005)³⁶ - 1] / 0.005
C = 60 / 0.1967 = $305.06
Hence, to achieve your goal of $12,000 in 3 years, you need to deposit $305.06 per month.
The amount of interest earned can be calculated by subtracting the total deposit from the future value:
Interest = Future value - Total deposit
= $12,000 - ($305.06 x 36)
= $1017.7
By following this investment strategy, you can reach your financial goal effortlessly and secure a bright financial future.